For the past little while there has been a fraud case underway with regards to the “fishy” shennigans of Livent co-owners Garth Drabinsky & Myron Gottlieb. The CFO, Maria Messina, joined the company back in 1996; she was “pilfered” from a public accounting firm and is a chartered accountant. She is one of the star witnesses for the Crown, arguing that she had no control over the external financial reporting. She has argued that she was told what results Livent owners wanted to project to investors and the general public. She plead guilty to a criminal charge of providing false financial information to the SEC.
I could witter on and on about the case. But what strikes me is that she got herself into this situation. Yes, she did end up being a whistleblower and exposing the questionable accounting practices of Livent. But she has a criminal charge against her, because she went along with providing false statements.
The woman is a Chartered Accountant, as a CA she must uphold certain ethical and professional standards. Granted I don’t know what they are for a CA, but for being a CGA I am required to never put myself into a situation in which my duty of care to the public is every compromised. My first responsibility, when confronted by questionable practices while employed is to express my concerns to my employer. If said employer still insists on following these questionable (and possible criminal) processes then I have to distance myself and explain why. If for no other reason being that I could be sanctioned by my Professional Association and stripped of my designation.
And let me make this clear – I worked damn hard to get it and I refuse to jeapordise losing it.
This woman, Messina, I have to question her ethical and professional standards and her attitude towards her obligations to the general public and investors. I certainly hope that any potential employers would think twice before considering doing business or even hiring her.
» Trials and Tribulations of being an accountant said,
June 26, 2008 at 10:33 pm
[...] Redstate | Conservative News and Community wrote an interesting post today onHere’s a quick excerpt For the past little while there has been a fraud case underway with regards to the “fishy” shennigans of Livent co-owners Garth Drabinsky & Myron Gottlieb. The CFO, Maria Messina, joined the company back in 1996; she was “pilfered” from a public accounting firm and is a chartered accountant. She is one of the star witnesses for the Crown, arguing that she had no control over the external financial reporting. She has argued that she was told what results Livent owners wanted to project to i [...]
AB said,
June 27, 2008 at 2:44 am
I’ve been told that one of the small pieces of the Sarbanes-Oxley legislation in the U.S. is that companies (public ones, like Livent was, at least) can no longer pilfer the accountants that used to audit them. It used to be common that a CA/CPA/CGA would put in 4/5/6 years at PWC/KPMG/E&Y auditing public companies. After getting tired of that they would get hired by a companies that they had audited. On the surface, it was great because the public company was hiring someone who knew their accounting inside-and-out and would barely have to train them. The problem was that after signing off on their financial statements while at PWC/KPMG/E&Y it is awfully tough to stand up to your new bosses when you identify issues from the inside when, maybe, you should have identified the issue when you were at PWC/KPMG/E&Y. Fact is, most people wouldn’t want to face the music of admitting that they may have fuc*ed-up (or hoodwinked) while at PWC/KPMG/E&Y. I don’t think the trial is over yet but I wonder if she didn’t want to admit that she walked into a fuc*ed-up situation that she ought to have seen before she was hired to a high profile position with high profile bosses. With SOX I believe that an accountant now has to wait 2 years from the last time they audited a company until they can work at the company. I don’t know if similar rules have been adopted in Canada but they may have helped a bit here becuase, I believe, that Livent traded in both the U.S. and in Canada.
opinionatedbean said,
June 27, 2008 at 9:45 am
yeah, we’ve been SOx’d to death up here
Even for companies that don’t trade in the US they are still complying as the controls are good and do foster a sense of security and relief for investors.
Not sure about the waiting 2 years, but in all my years of accounting I haven’t seen an auditor jump ship from auditing a firm to working for a firm. In my last company we used 2 different firms – one for external and SOx audits and another for professional services (tax advice mostly).
AB said,
June 28, 2008 at 3:57 am
I think that was another big chunk of SOX…the separation of the auditors from the “professional services” and/or consultants. Again, it used to be a lot easier and awfully convenient for an auditing firm to cross-sell their consulting or tax business before SOX. It has been a while since I’ve seen an Enron documentary but I think that one of the reason’s Arthur Anderson went belly-up (instead of just being fined or something) was that all of the conflicts of interest of them auditing and consulting (and making millions at it) eventually came to light.
I still haven’t heard a great explanation of the difference between “advisory services” and “professional services”. A friend, an accountant, insists that even auditors are considered “advisors” but to me “advisory services” means the same thing as a “consultant”. I’m not directly in the industry but I don’t know the difference. Maybe that’s I didn’t become an accountant.